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Published on 24 November 2017

Scottish Government Discussion Paper: The Role of Income Tax in Scotland’s Budget

The LITRG welcomes the opportunity to follow-up to our participation in a Roundtable Discussion by responding to the Scottish Government’s discussion paper on income tax, which has helped open up debate on the use of Scotland’s income tax powers.


We think it is helpful that the discussion paper sets out the four key tests the Scottish Government will apply when setting income tax policy, and we emphasise the importance of striking a balance between various competing aims.

In our submission, we consider some of the possible interactions between the Scottish income tax system and the reserved tax, social security and welfare benefits systems, including universal credit (UC), National Insurance contributions (NIC) and Marriage Allowance. We also point out that to an extent these interactions are inevitable, so it is crucially important to consider how any adverse effects might be minimised, in particular for those on low incomes, who are least able to cope with them.

The Scottish Government discussion paper is available on the Scottish Government website.

Our submission is available at ‘The role of income tax in Scotland’s budget’ and accompanying schedules at ‘income tax comparisons: appendix 1 and appendix 2'.

Joanne Walker

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